Progress Residential issued its third securitization of the year backed by rents from a portfolio of single family homes. The excerpt below is from Kroll Bond Rating Agency’s pre-sale report issued October 20, 2015. Visit www.krollbondratings.com for a full list of Kroll’s research.

On a WA basis, the rents for the overall portfolio are 99.6% of the market rents indicated by the RentRange data. The adjacent chart illustrates the in-place rents relative to the RentRange data for the top 10 CBSAs represented in the transaction.

KBRA observed that the in-place rents were slightly below market rates. The average in-place rents for seven of the top 10 CBSAs are below market, while seven are above market. Notably, Phoenix has in-place rents that are 84.8% of the prevailing rents. At the portfolio level, 52.8% of the properties are leased at above market rates with WA in-place rents of 110.5% of market. Alternatively, 47.2% of the properties are leased at below market rates with WA in-place rents of 89.0% of market. The properties located in Houston, which represent the largest CBSA exposure in the pool (10.3% by BPO value), have underlying rents that are, on average, 99.4% compared to the market. Underlying rents for the second largest CBSA, Tampa (8.5% by BPO value), are 100.8% of market rents. Charlotte represents the third largest geographic concentration (8.5%) and has rents that are approximately 101.7% of market. Phoenix has the largest difference in rents compared to RentRange data with 84.8% of the market rents. The properties in the remaining six CBSAs have rents that are below market, with an average of 98.8% of market rates.